Voluntary job losses are on the cards at the giant Stanlow refinery, the second largest in the country.
They come as owners Essar Energy plan to downsize the refinery, previously operated by Shell, to ensure its future.
The refinery has recently been suffering losses on each barrel of oil handled as well as overall problems facing refineries across Europe.
Oil commentators say the industry has been ‘hammered’ by weak demand, over-capacity and huge flows of diesel from overseas competitors.
The owners plan to mothball the smaller of the two refining units at Stanlow by the autumn reducing the refinery’s capacity from just under 300,000 barrels of oil a day to just under 200,000 barrels a day as part of measures to reduce costs by US$100m.
It has not been operating at capacity.
A third of the output will then be petrol and just under 60% kerosene and diesel.
A small proportion will be fuel oil which covers uses including central heating oil.
Uses of kerosene include fuel for jet engines.
At present Stanlow meets about 15% of the country’s transport fuel needs.
Earlier in the year, a statement revealed throughput in a three month period fell by more than two thirds against 18 million barrels in the same quarter a year previously due to major maintenance and a furnace incident which is due to be repaired this year.
Losses last year were said to be US$287m.
Commenting on the offer to the 1000 staff at the refinery, a spokesman said: “Essar Oil UK announced in February our intention to increase the production of higher value products from the Stanlow refinery by closing the smaller of our two crude refining units later this year.
“As a result of this optimised configuration going forward, organisational changes may be required to create additional efficiencies.
“Before considering any changes, Essar Oil UK has in conjunction with a proposal from a specially formed joint working group of employees from across the company, decided to offer an entirely voluntary leaver incentive scheme to staff who may be considering alternative options for their future career.
“The offer is available to all employees, but will be granted on a discretionary basis, dependent on the right blend of skills and experience required to help us build a positive and long term future for our business.”
No compulsory redundancies are foreseen by the company which also has 500 contractors at Stanlow.
Earlier in the year Essar denied reports it planned to close the refinery pointing out it is ‘well-positioned to supply UK fuel demand, given its advantageous location and following recent upgrading work to optimise product output’.
It added: “The refinery is supported by integration into extensive pipeline logistics and good road links to access local and regional markets.
“Essar Energy and the entire transport fuel supply industry are working together with the UK Government to improve the resilience of UK refineries and importers.”
It said the US$100 million cost improvement programme would ‘ensure the business is able to weather this period of exceptionally poor refining margins’.
Last autumn, the company completed the uplift of a giant 400-tonne-plus £23m unit for a key petrol-producing installation at the refinery as part of a refurbishment project.
